The Effects of Ceos on Performance

Ceos do influence performance, but the effects are much smaller than a reading of the business press suggests. Researchers measure the strength of relationships by a correlation coefficient which varies between zero and one. If you expected this value to be higher, then you should take that as an indication that you are prone to overestimate the predictability of the world you live in. It is difficult to imagine people lining up at airport bookstores to buy a book that describes the practices of business leaders who, on average, do somewhat better than chance.